How partnerships with airlines are getting a fintech start up off the ground.

UTU, a Singapore based global tax refund company, is putting money into the pockets of travellers.

In this episode, I talked with Ameer Jumhaboy, Co-founder of UTU, as he explains how the Fintech start up has partnered with carriers including Emirates and Singapore Airlines to expand quickly based on a shared vision of giving customers greater transparency and value for money.

Download UTU app here.

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Transcript

Jim James: 0:00

Hello, and welcome to this episode of the UnNoticed Entrepreneur. Today I'm delighted to have Ameer Jumabhoy joining me all the way from Singapore. Ameer, welcome to the show.

Ameer Jumabhoy: 0:08

Hey, thanks, Jim. It's great to be here, and I'm so glad that we're getting a chance to talk. It's been a few years since you saw me as a kid in Singapore, and I'm glad we're able to sit down and have a great business discussion today.

Jim James: 0:20

Yeah. It's a real pleasure having seen, you know, your father built a business, and you build a business. Ameer, let's explain to everybody about Utu and how you're using partnerships to build a global tax refund brand.

Ameer Jumabhoy: 0:33

Yeah. So Utu is a very interesting company. My co-founder is my dad and he has 25 years of experience in this space. The problems in the industry today are primarily around the fact that tourists always complained to me that they are only getting about half the refund that they expect to receive. And so we're trying to solve that specific problem of making sure that we're putting more money back in the pockets of customers. And the way we've done that is through a product we recently launched, which is the world's first tax-free card. And the way it works is you, you know, travel to say France. You pay for a handbag with your Amex card or your VISA card issued by your, you know, your local bank, but when you choose how do you want to receive the refund? Stick in our card number, and we'll upsize the value of your refund by 25%. So 240 or refund. We'll give it to you in 300 euros if you choose to take it in the form of a reward from any one of our partners, including some of the world's leading airlines, such as Emirates or Singapore Airlines.

Jim James: 1:33

So, Ameer, thanks for, for the concise explanation, but it's, it's actually quite a sophisticated business proposition, isn't it. And how are you helping consumers to get hold of the Utu card? Because it's through partnerships, isn't it? I think.

Ameer Jumabhoy: 1:49

It is through partnerships. And you know what I think the last couple of years has done, especially in my industry, which is travel-related is realigned the values of big corporations and, and fantastic card products like, like what Emirates has or Singapore airlines or Ethiopian always has, with what we, as small FinTech companies do. And I think at the end of the day, we are all serving the same customer. And we're all dancing a different dance, but it's about fairness. It's about giving people delightful experiences, and it's giving people value on their travel and increased value. And I think when you find those commonalities people can come together around a table and say, "Okay, look, the traveler is going on a journey. They're flying your airline and were a tax-free operator. How can we sort of meld our, our brand offerings to provide a more delightful experience." And so the way we've done it is through the, the rewarding of airline miles, and of course, we're very pleased and proud of the partners that we have. But for the, for the big airlines, one thing that I'm very humbled by is how well they've taken to our proposition. Because they do see again, going back to what I was saying, the value in what we're able to offer our same customer.

Jim James: 3:04

So tell us, though, how do you sort of pitch that? Because you mentioned you're a small FinTech player, and there are other tax-free shopping solutions, Ameer. So to some degree, you know, Utu as a disruptor. From a PR point of view, how did you sort of encourage these big brands like Singapore Airlines and Emirates to, to work with you as Utu rather than these established brands?

Ameer Jumabhoy: 3:29

So the airline industry in particular was very interesting because they have never really been traditional players in the tax refund industry. The tax refund industry historically has been a very B2B industry, and over the last few years, we have seen some B2C players come in, including companies like ourselves. However, the way we started thinking about what a tax refund is, is very different to most people. We actually think of a tax refund as a tax reward because it's an incentive provided by governments to encourage the spending in countries to help to boost the tourism multiplier by increasing exports. And the whole premise is to turn the individual tourist into an individual exporter. And if you then can, can kind of keep up with that logic, what we're essentially saying is that it really is a question of rewarding spend, and it really is an incentive. So you have payment rewards, which has shopped with my say Barclays card and I'll reward you in Barclays points. Get a coffee from Starbucks and get a Starbucks Star. But shop in my country and I will reward you by way of a VAT refund. So it really is a country reward, and if you look at what the airlines have been able to do in the last couple of years, they have all been able to, or many of them in this case, including all of our partners, have created a really interesting ecosystem where that points have started to become an experiential, experiential modality of transactions. Right. So, so today, what can you do? You can use Emirates Skywards Miles, and you can use it to redeem football tickets as an example. So it's not just about the airline. It's about creating delightful experiences. I think when we speak to the airlines they create those experiences in their wide realm, and we help to create it in a very specific realm that we know very well. And so they're very happy to work with us because I also think that if you go back to economic theory, do things that you're good in, and what you can specialize in. And we're a tax refund specialist, and that's a gap that we can help to plug in the airline while also allowing them to participate in the global tourism retail ecosystem.

Jim James: 5:39

So Ameer, when we were talking before the show started, you were talking about how you've worked with the airlines who have really almost become advocates of the Utu tax refund system. Can you just explain to us how have you helped those airlines to explain your proposition? So from a PR point of view, you're using these partners to explain to their customers how Utu helps them to get the most from their tax refunds, aren't you? How are you doing that?

Ameer Jumabhoy: 6:08

So I think one thing we're very blessed with is all about airline partners have an extremely loyal customer basis. And, and I think with that, you have a great sense of trust and a great sense of security in this brand that you have been loyal to for so many years. But now we're going beyond loyalty. And as we go through more experiences, we're trying to basically message our value proposition in a way that people can understand a little bit easier. Because the tax refund industry has been very opaque for many years. Today, however, you have so much information at your fingertips, yet there's still very little information that you can find about where your refund is going up. How are you losing up to half of your refund. Who does it go to? And what we're doing is we're trying to unpack a little bit of that opaqueness and say to the user, "Look, it's not about losing half the refund. It's actually about us helping to get back more. And give it back and put it into your pocket." I think that resonates very well and easily with people because there are two common complaints I get with tax refunding. One, the lines of the airports are very long, but I believe that we'll be sorted through digitization. Two, is that I just want to know what's happened to my refund. So we're helping to, to provide a little bit of those nuggets of information, and a great way to do that is by getting people used to the idea that a tax refund is actually a country rule and it can be received in the form of the air miles. So there is this great synergy between the message that you know, Skywards or Sheba Miles or some of our upcoming airlines, which, which, you know, you'll find out soon about, have been able to message to their users and their customer base. But it's also about kind of finding a way to meld our simple message to say, "Look, when you're shopping, when you're flying your favorite airline, this is the one tax-free card you need to get more back in the loyalty program that you love."

Jim James: 8:00

Right. And so for the airlines and fewer partners, it's really enhancing their customer experience as well, isn't it? You, you mentioned Ameer, about digitisation. Could you just take us through how Utu has been using digital platforms and mobile? Because that seems to be a complete transition from getting an old receipt and take it to the airport and shopping it and giving it to the person behind the counter. How has Utu pioneering in that and helping customers to understand the process?

Ameer Jumabhoy: 8:32

That's a great question. And you know, what I love about technology is it keeps you on your toes. I mean, the things we can do today in 2022, some of that you couldn't have done in 2020, or 2019 just before the pandemic. And so, over the course of the last two years, which has not been the easiest couple of years for us. We've tried to leverage the best of mobile technology to understand, okay, on the customer journey, what are some of the key issues people face, and how can we use the power of the mobile phone of today to solve them? So can you submit your tax invoices by taking a picture, right? Can you start to issue virtual cards on the mobile without having to go to a bank and lineup to do it right? And I think we've seen some great Fintechs come out of, where you are Jim, in the UK, that have shown the way in that. And we're trying to do that in our own way, but I think the power of mobile technology today has significantly cut a lot of friction in our industry. And I believe that the digitisation will always continue, but I think the real key for us is how do you combine the power of the phone with the mental gymnastics around the business model transformation? Which I think for me, I'm most proud of in our company, that we were able to ideate, you know, this concept of the country rule.

Jim James: 9:49

So with technology, obviously, you've got a direct connection to the user, right. To the shopper. Ameer, how is that working now from a branding point of view? Because if I download the Utu app, am I now need to have this process explained by, by you or by your partner? Or by both at the same time, because from a communications point of view, these are opportunities for the consumer to become confused and therefore to not trust.

Ameer Jumabhoy: 10:17

Absolutely. I think, you know, it's a combination. It's that third option you were mentioning, Jim. And I think it's really about firstly getting the emotional connection with a potential customer, and our partners have been incredibly helpful. In, in getting in getting that, that part going. Once people have bought in on the emotional side to say like, "Hey, I want to get my refund upsized in a reward of my choice." The next question is to say, "Okay, let me explain to you how this actually happens." And that's where our side of the app takes over. So it's really about the emotional hook, but it needs to be an emotional hook that is customer-centric, fair, and adds significant value to the tourist journey. And then we go into a little bit more of the nitty-gritty on the app on how do you actually issue that card. What is the KYC process? Which is important because don't forget we're showing cards all around the world, and it's not as straightforward as say ensuring it just domestically. So how do you get a global card out? You know, how do you onboard the customer? How do you explain to them how this card works? Because this is a new paradigm shift and the way we think about this industry. It's a niche industry. It's actually quite a large one because the impact it could have on tourism-based economies could theoretically be huge. And that's really what we're after is to drive the country's economies as we come out of this pandemic.

Jim James: 11:38

So you mentioned one thing about the size of it. Is there an issue that most travelers maybe once or twice a year vacation? And the smaller amount is business travel, which is kind of your professional traveler. From a messaging point of view, Ameer, do you, do you have to address these two audiences differently? They, they feel like the, the, the, the occasional leisure traveler who has to get up to speed and maybe does a lot of shopping on one holiday but doesn't do anything for six months, and the professional business traveler, who is, you know, maybe once a month traveling. From a messaging point of view, how you're overcoming the difference in kind of level of expertise and comfort between the traveling audiences?

Ameer Jumabhoy: 12:16

That's a great, that's a really good question, actually. And not one I often get. The way I've sort of thought about it, business travelers are often on a very tight scale and often in a rush, and many of them actually don't end up doing the refund because you know, they're constantly on the move. Leisure travelers have a great holiday, and then they're stuck with this process at the end that really just does not do them any favors on money that rightfully belongs to them. So I think the way we've thought about our messaging, Jim, is to really say, look when you think of ride-hailing, you think of Uber. When you think of the new way of doing foreign exchange, you're thinking, of of Revolut. And, you know, the, the, the way I've started thinking about our product is if you look at pre-pandemic. What did you take when you traveled? You took your leather wallet with maybe a physical cards. Maybe a travelers check if you're coming from some countries and a physical passport. What's my travel wallet today? I have a folder on my phone, I've got Revolut, I've got Klarna for my BNPL, right. I've got Kayak for my flights, and I've got Utu for my tax-free. And so we're really trying to be that ubiquitous name and household name that when you want to do tax-free no matter who the operator is, no matter what shop, no matter which country that does a tax refund shopping system, you want to be using Utu to up-size your refund. And that's the way we think about it.

Jim James: 13:36

Okay. So that's really, so there really is a direct-to-consumer proposition, isn't there Ameer, for Utu?

Ameer Jumabhoy: 13:42

Absolutely. It's about putting customers at the center of the transaction, giving them more on money that rightfully belongs to them, and putting power and choice and control to, to the, to the and the tourists. And that's really what we're after. It's really about redefining an experience and doing it on a, on a fairly large scale across 50 countries.

Jim James: 14:04

So can we just talk then about the acquisition of partners, because that's a key part of the business, I'm imagining. How are you getting those partners, Ameer? Is it trade shows? Is it magazine PR? Direct connections? Just talk us through that, can you?

Ameer Jumabhoy: 14:20

You know, it's, it's a, it's a really funny one because, you know, we hustled at the beginning, we hustled. I mean, you know, we had this great idea to refund in air miles and upsize people's refunds. We didn't know how to reach the airlines. And so what we did was we sent a cold email to a couple of airlines. We got a response from our first partner, which was Emirates. And we had a, a really great, you know, ideation session with them. They love the proposition, and you know, we became partners. And once Emirates joined in, you had a little bit of formal perhaps, but a lot of other airlines also saw a tremendous opportunity and don't forget in many cases, you know, Singapore Airlines customer may not necessarily be a Sheba Miles, Ethiopian Airlines customer. So you have very unique user groups. So there was not really much bleed between the airlines. So everybody was, sort of, happy to jump on and say, "Okay, we're seeing this great benefit that we can provide to our customer base. Let's do this together." So we were really lucky to start with the first few partnerships, which is what you see on our up-to-date - Thai Airways, Ethiopian, Singapore Airlines, Emirates and Qatar Airways. We've got a few more airlines coming on board later this year. But every single one of them believes in this customer-centricity. But, you know, at the beginning, it was that entrepreneurial hustle of just going through LinkedIn, reaching out, cold emailing, cold calling. And then, you know, some great people pick up, you have a great conversation, and off you go.

Jim James: 15:47

Oh, so it really was a, although it's a big business proposition, it's still a very personal pitch.

Ameer Jumabhoy: 15:54

It is personal, but I, you know, I've always held this longstanding belief that business is really done between people. And it's about that human connection getting people to, you know, buy into your story and you buy into their story. And I love that connection because I think the moment that the values align It creates a really great chemistry, and out of that chemistry comes great products, and great services that delight millions of people worldwide. And I think that is just the beauty about what, you know, the internet age especially has been able to do.

Jim James: 16:26

So Ameer, for those people that haven't heard of Utu, can you give us an idea of scale? You've mentioned this sort of partners you've got. I don't know. Can you share with us some idea of number of members that you have, or, or number of refunds?

Ameer Jumabhoy: 16:37

So we're, you know, we launched in October the tax-free card, and as I said, it scales 50 countries. Omicron definitely, was a little bit of a spanner in the works, and we haven't put in very much into marketing at all. But what I will say is we've got about in the low five figures in terms of active users. We are very happy with the number of transactions that have been going on. And what I'm most happy about is out of our active users, the majority have actually chosen to be refunded, in an up-sized air miles refund. So I think the most important thing is this thesis of country rewards is really starting come into fruition. And now for us, it's really about taking the next step to say, now that this card can be the up-sizer across the whole world, can we actually start to go into different countries as a fully-fledged refund operator and start offering even more value on the ground. And that's something that you're going to start to see from the summer.

Jim James: 17:32

Oh, so that's interesting. So phase one is to prove the concept, and enough users have got the card, got the app, and getting their refunds. Next is actually to go into physical locations is that what you're saying, Ameer, for Utu?

Ameer Jumabhoy: 17:45

No. So with the card, it's essentially a VISA card. So as long as you send your refund to that card, the moment it hits our card, we're able to provide you that up-size. So when I say in-country means that we have to be connected to the customs of that country, and we can actually start to handle the refund within the country itself and not just upsize, you know, the, the refunds from other operators, as we do currently. So it's really now a question of the disruption coming into the infrastructure of the tax refund system. And for that, we're going to come to some of the largest markets in the world for tax refunding over the summer.

Jim James: 18:20

So Ameer, it sounds as though you are not only introducing a new technology, but also you're changing behavior and practice both within the industry and within consumers when they travel overseas. Is that, is that right about Utu?

Ameer Jumabhoy: 18:32

It is. And, and, you know, it's, it's very exciting to be able to redefine that a user experience. But at the same time, it is challenging because people have been used to doing, you know, tax refunds a certain way for a dozen years, or probably more than that probably like 20, 30 years, right? So to unlearn some of those behaviors, not so, not so easy. But unlike many other internet companies, we don't have too many repeat customers because tourists from Asia are coming to Europe, as an example is, coming once every two, three years. In some cases, you have outliers who come multiple times a year, but I would say the sort of middle band, 80%. You have a new tourist every day. So it is incredibly challenging to have to, to teach somebody a new way of doing things every day. But as I look at the younger generation and as they travel more, as they get more into experiential sort of journeys, it provides tremendous opportunity because everybody today is after value. And I think the pandemic has shown us that customer centricity is so important.

Jim James: 19:31

Ameer Jumabhoy joining us from Singapore. Co-founder and CEO of Utu.

Ameer Jumabhoy: 19:36

Co-founder, my dad is my CEO.

Jim James: 19:39

I think that'll be the way it stays for a while. But you've got a great CEO, a great co-founder, knowing as said as I do for so many years. Ameer, if you wanted to find out about you and Utu, how can they find you?

Ameer Jumabhoy: 19:49

So, I mean, the best way is, you know, if you're planning to travel in the summer, download, activate the card, and use it to receive your refunds. You know, we are on our partner's websites. So if you are a frequent flyer of any of our partners, check us out on their websites, learn about the kinds of promotions we have, and see what kind of value we can deliver you for your next tax repurchase.

Jim James: 20:09

Ameer Jumabhoy you've delivered a lot of value, a lot of interest. Thank you so much for what you're doing for international travelers, of which I'm one. And for all you do for the industry and sharing today for other entrepreneurs, how you are getting noticed through amazing partnerships. Thank you so much.

Ameer Jumabhoy: 20:22

Thank you, Jim. It's been a pleasure being here and, you know, hope everybody has a great week ahead.

Jim James: 20:27

Yeah. Likewise and stay safe no matter where you're flying to, do stay safe.

Ameer Jumabhoy: 20:31

Thank you. And you.